Thankfully, at least on Illidan, people are willing to drop group once they have the tag and start another group, thus sharing the tag. Now, I'll grant that this only really works when you have a server that's basically only populated with one faction, but when you have a server with a population as generally douchey as Illidan doing things like tag sharnig, I find it hard to imagine that other servers haven't figured that out yet.
I've seen this mentioned on our server as well. Though, IMO, this sounds very exploitish and I refuse to take part until I see something definitive that it is not.
A boss that drops PVE only gear, should be in an instance and be much harder.
Are there any other rare's in the game that are the same as Galleon? No, they all drop mostly vanity items or items you can sell on the AH. The whole point is PVE gear should be available to anyone that can form a group and kill the boss. Put him in an instance like OS or Onyxia and make him actually difficult to kill.
I want to earn the loot as much as the next person but when he goes 118 hours between spawns and I form a raid group that alternates people camping him and I sit there for over 48 hours myself and someone else gets to kill him because they were lucky enough that their aoe hit him before mine. That doesn't sound fair at all. Not on a PVE server at least.
The way Galleon is set up, the kill is based off of luck with being able to place your AOE's and get the tag before another group. That is not skill based in the slightest. That is pure luck.